Small capital, big money

Author: Ding Di
Publisher:
Publish Date: 2006-05-01
Features: This book tells readers about many success stories of small-scale businesses, condensing the wealth-building experiences and wisdom of numerous small business entrepreneurs. Through the growth journeys of ordinary people who turned small businesses into big ventures, it demonstrates that wealth can be accumulated through small investments. Entrepreneurs with limited capital often have the potential to become millionaires in the future, as long as they possess stable temperament and a spirit of perseverance. Money can indeed make money, an undeniable fact. With proper management and a good "idea," money can generate more money, even without initial capital.
When Mr. Lu was in college, he wanted to start a stamp business. He collected the names and addresses of over 2,000 stamp enthusiasts across the country through the Stamp Magazine and stamp companies. Using the few thousand yuan he earned from selling greeting cards, he published a double-sided octavo (Nanhua Stamp Newsletter) and sent it free of charge to these enthusiasts. One side of the newsletter provided stamp market information, while the other listed stamp varieties and names. After a period of free distribution, the stamp enthusiasts began to reply and expressed interest in purchasing certain stamps on their behalf. Mr. Lu saw an opportunity to make money. However, at the time, he had no capital, yet the opportunity was before him. What should he do? After deep contemplation, a brilliant plan began to form in his mind. He found a major stamp supplier and signed a contract for 20,000 yuan worth of stamps, paying only 10% as a deposit while requesting two months to settle the payment. Then he began his business of acting as an agent for stamp purchases, operating on a "payment upon delivery" model. In January 1987, he made over 30,000 yuan in sales. By 1989, the Nanhua Stamp Newsletter had distributed over 50,000 copies, reaching 50,000 customers, and his stamp business generated monthly sales of over 300,000 yuan. He always operated on a "payment upon delivery" model, leveraging others' money to make profits, which was both safe and reliable. Due to his influence and reputation, more stamp enthusiasts were willing to do business with him. Later, he took over a storefront for a certain association and rented a mailbox from a post office, establishing his position as a leading stamp agent in mainland China.
In 1991, due to stock market regulation, the stamp market flourished, and stamp prices in major cities like Beijing, Shanghai, and Guangzhou roughly doubled. Mr. Lu became a prominent figure in this boom. As he gradually accumulated wealth, in addition to continuing his stamp businesses like the "Postage Stamp House" and "Dragon Stamp Trading," he expanded into various other ventures, including general merchandise trading, shop leasing, old building transactions, real estate brokerage, and real estate development. In these new businesses, he still relied on his "old idea" of "using others' money to make profits."
In 1991, Mr. Lu began experimenting with real estate transactions. At the time, he didn’t have the financial means to buy property, but he had an idea: purchase an old house, negotiate a deposit of a few thousand yuan with the owner to secure the property, then place an advertisement in a Hong Kong newspaper to find buyers. The buyers would provide renovation plans, and Mr. Lu would handle the renovation and installation of phones. This way, an old house priced at only 800 yuan per square meter could be sold for over 2,000 yuan per square meter after renovation. Both buyers and sellers were satisfied with this approach. Buyers appreciated that the house was renovated to their specifications at a reasonable price, while sellers were happy to have someone help them sell the property at a good price and recover the funds promptly. For Mr. Lu, it was even more satisfying, as he could make a thriving business without spending much money himself. He once again realized that using others' money to make profits was indeed effective and practical.
The secret to Mr. Lu’s success lies in his ability to seize opportunities. When an opportunity arises, he knows how to ride the wave and use others' capital to achieve mutual benefits. This method of making money is very stable when executed well, with minimal risk.
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